As Warner Bros. Discovery’s board mulls over a second round of bids from Paramount, Comcast and Netflix, a factor it’ll have to consider is just how easily a deal will get approved by regulators.
That was the crux of a lot of the chatter that emerged in the days leading up to the Monday deadline, which saw the three companies submitting new, binding offers for all or parts of Warner Bros. Discovery, according to various press reports.
Netflix showing strong interest in WBD’s assets, including making a mostly cash offer to acquire them, coincided with reports that the White House had antitrust concerns, while Comcast, which also submitted a bid, still has to deal with the challenge that President Donald Trump loathes CEO Brian Roberts. Paramount also reportedly sweetened its bid with a reported all-cash offer financed by asset management firm Apollo Group and Middle Eastern sovereign wealth funds and is selling itself as the easiest path to getting its deal done thanks to CEO David Ellison and his father’s cushy relationship with Trump.
The new round of bids and the chatter signals how the stakes have gone up in the race for WBD. The winner would gain valuable streaming, IP and studio assets and, in the case of Paramount, also expand its cable TV footprint. Any of the three scenarios will lead to a massive reshaping of the entertainment industry and a further consolidation of power in Hollywood.
TheWrap previously reported that a final decision is expected to be made around Christmas.
Netflix and Paramount declined to comment, although a Paramount representative did not respond to a later request for a comment on the prospect of the sovereign wealth funds participating, which TheWrap previously reported on. Representatives for Warner Bros. and Comcast did not immediately return a request for comment.
Until then, here’s a rundown of where each bidder stands and some of the regulatory challenges they each face.
Paramount’s smoother road
Out of all the players, Paramount Skydance would have the easiest time acquiring WBD, mostly because it has already played this game. The company is fresh off Skydance’s $8 billion acquisition of Paramount, which cleared in August. Since it already secured FCC approval from the Trump administration before, several experts, including LightShed Partners partner and technology analyst Rich Greenfield, have noted that the previous acquisition puts Paramount on the regulatory “fast track.”
Another thing working in Paramount’s favor is its interest in the company overall as well as its deep pockets. Out of the three companies interested in bidding on Warner Bros. Discovery, Paramount is the only one that wants the full company and not just the Warner Bros. studio and streaming division. Yep, it wants cable too. Paramount noted it would increase the amount paid in cash to shareholders from 60% to 80%, bumping up the breakup fee from $2 billion to $2.1 billion.
It’s also clear that Paramount really really wants this. Whereas Comcast and Netflix only submitted one previous bid, this marks Paramount Skydance’s fourth bid. The first three were rejected for being too low. Additionally, Zaslav may be personally interested in selling to Paramount. CEO Ellison offered Zaslav a co-CEO and co-chairman title as part of his Warner offer.
So what’s working against Paramount? Concerns over the theatrical division will be a hurdle, since Paramount acquiring WBD will drop the number of major film studios from five to four. But perhaps the main obstacle to clear is one that can’t be measured by hard financial figures.
It’s only been four months since Ellison took control of Paramount. So far, the only things to come out of that acquisition have been a lot of layoffs and departures (bye, over 1,000 employees and gone-in-2028 Taylor Sheridan) as well as several headline grabbing deals (“South Park” and UFC’s deals are in the billions). Simply put, it’s way too early to know if the Ellison era is a good — and lucrative — era of the company. Despite the creative-friendly reputation Ellison has in the industry, that’s sure to be a concern.
Can Comcast overcome the Trump factor?
At first glance, Comcast taking over Warner Bros. makes the most sense. Both companies house legacy Hollywood institutions — NBCUniversal and Warner Bros., respectively. Thanks to its movie studio arm, Comcast understands the challenges of theatrical, and because of Peacock, it understands the headaches around streaming. Comcast is also reportedly the preferred option for WBD head Zaslav. Two struggling giants teaming up to combat this difficult landscape is a matchup that works, like Godzilla and King Kong teaming up to take down the Skar King (IP, folks!).
The problems come down to money, possible theatrical overreach and Trump. It’s widely believed that Comcast’s pockets aren’t as deep as the Ellison family’s Oracle-powered fortune. That being said, according to the New York Post, Comcast CEO Roberts was considering a potential offer that could reach as high as $28 a share for just the studio and streaming business.
As for the theatrical side of the business, Comcast will face the same questions as Paramount. At the moment, there are only five major movie studios: Walt Disney Pictures, Warner Bros., Universal Pictures, Paramount Pictures and Sony Pictures. Two of them being owned by the same company will raise some regulatory eyebrows no matter which companies are involved.
Other than cash, it’s the Trump administration that may also pose a major threat to Comcast scooping up Warner Bros. The president has been outspoken about his dislike of Roberts, calling the CEO “a disgrace to the integrity of broadcasting” on Truth Social. Though NBCUniversal will be spinning its cable assets off into Versant sometime early next year, Comcast’s ownership of MSNBC (now MS NOW) could rub Trump the wrong way. Comcast also owns NBC, which is home to Seth Meyers’ “Late Night,” which last month drew Trump’s ire as he called for the host to be fired. As the “60 Minutes” lawsuit ahead of Skydance’s acquisition of Paramount demonstrated, Trump isn’t above dangling FCC approval to make major media networks act the way he wants.
When Netflix’s size is a disadvantage
Like Comcast, Netflix only wants Warner Bros., which encompasses Warner Bros. Discovery’s streaming and studio divisions.
Let’s start with the positives. Warner Bros. Discovery has warmed up to Netflix’s potential bid, Gasparino reported. Netflix has always had a healthy respect for Warner. Way back in 2012, Netflix co-CEO Ted Sarandos famously said, “We’re going to become HBO before HBO could become us.” Acquiring the company behind HBO — especially during a time when Netflix is interested in “selective” merger and acquisition deals — would be a big step in that direction.
Netflix also has deep pockets and has proven it’s willing to overspend to get what it wants. But that’s about where the pro-Netflix argument ends.
Because Netflix is notoriously against showing movies in theaters, its interest in acquiring one of the five big movie studios has ruffled the feathers of many in the industry, especially since theater attendance is down nearly 50% compared to pre-pandemic levels. If Netflix were to acquire Warner Bros., it’s hard to say whether it would abandon its current strategy and lean into theaters or if it would continue to make its movies streaming-first. And if Netflix did lean into theaters, that leads to a whole other set of issues. Netflix would have to learn the international theatrical ropes in a very short amount of time.
But the biggest argument against Netflix is that it’s simply too big. Netflix is consistently the top premium streamer when it comes to Nielsen’s monthly The Gauge reports. If it were to acquire HBO Max as well, the ensuing streamer would be an even bigger behemoth in a landscape where it dominates. Government officials are already thinking about antitrust concerns if there is a Netflix acquisition. That potential investigation has been compared to the lengthy antitrust investigations Google and Amazon underwent and that Netflix has avoided so far.
Overcoming those regulatory hurdles from the Department of Justice would likely take more than two years before it even goes to court, according to the New York Post. It’s unclear if Netflix or Warner Bros. would want to undergo this joint headache.
Ironically, what could save Netflix is YouTube. If the case can be made that YouTube, which consistently leads the Nielsen charts, is the actual entertainment leader, Netflix may be able to acquire Warner Bros. without antitrust concerns. It just comes down to how well YouTube’s user-generated content can be separated from Netflix’s premium content.
